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We all recall, because it was only two days ago, that our new overlord, one Jack Dorsey of Twitter, declared that he was a universalist humanist. Being as Jack wants to rule the world, and especially to take over the world mind, he has no real use for currencies. After all, currencies are printed by nations and in the one world he wants to inhabit, there will be no nations.
So, Jack is all-in with Bitcoin. I have mentioned it on occasion, offering what seems to me to be the only sensible opinion-- namely that it is a bubble, like Dutch tulips. Nimble traders might be able to make some money with it, but, like the game of musical chairs, someone is going to be left holding the bag.
The amusing part now is that some people, possessors of hundreds of millions of Bitcoin have forgotten their passwords. If you forget your password, you no longer have any Bitcoin. And, as much as everyone insists that it is unhackable, that feels to me to be a challenge that no serious hacker could possibly ignore.
Anyway, Christine Lagarde, the head of the European Central Bank, formerly the head of the International Monetary Fund, does know something about banking and currency. And she has far more of a say about the future of Bitcoin than your humble blogger. One notes that, for making the ensuing comments, she might well be banned forever from Twitter.
Zero Hedge has the story about Lagarde’s view of Bitcoin:
Lagarde made the comments during a Reuters Next conference earlier today, during which she asserted that Bitcoin was not a currency.
“When you look at the most recent developments upward, and now the recent downward trend … for those who have assumed that it might turn into a currency, terribly sorry but this is an asset and it is a highly speculative asset,” she said.
#Bitcoin ‘has conducted some funny business and some interesting and totally reprehensible money laundering activity,' @ECB President Christine Lagarde said at the #ReutersNext conference https://t.co/iaZUQ9LYZQ pic.twitter.com/ciKDqJZnbV
— Reuters (@Reuters) January 13, 2021
Money laundering… organized criminal syndicates… who would have imagined that such groups would be drawn to Bitcoin:
The former head of the IMF, who was previously found guilty of financial negligence by a French court over a €403 million arbitration deal in favor of businessman Bernard Tapie, went on to accuse Bitcoin of being heavily embroiled in criminal activity.
“(Bitcoin) has conducted some funny business and some interesting and totally reprehensible money laundering activity,” said Lagarde.
So, Lagarde proposes that Bitcoin be regulated. To safeguard investors, I imagine. But, what will happen to the value of Bitcoin once it becomes regulated?
The ECB head went on to call for Bitcoin to be regulated by financial authorities.
“There has to be regulation. This has to be applied and agreed upon […] at a global level because if there is an escape that escape will be used,” she said.
Globalists and technocrats have long begrudged Bitcoin because it is decentralized and therefore impossible to come under the control of centralized financial institutions. The cryptocurrency has also provided a refuge for dissidents who have been deplatformed by regular financial services and institutions over their politics.
Bubbles do not last forever. We do not know when the Bitcoin bubble will burst. It might double or treble before it does. Still and all, unless you really know how to trade markets, it is something to avoid.
9 comments:
People who have dollars in their wallets, as opposed to say, Argentine pesos, have an almost insurmountable hurdle in understanding what the utility of Bitcoin might be.
As it happens, most Argentinians who have money keep it in dollars, not in pesos.
It is legal for Argentinians to possess pesos now, but was not always so in the past.
I believe "money" is whatever people agree on and which can be used in trade or financial transactions...
The Island of Stone Money
https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money
Bitcoin is funny money? Who woulda thunk it?
The Island of Stone Money: I trust NPR as far as I could throw any of that stone money from where I am, which is nowhere near that stone money. That's just me. Your mileage may vary.
Of course, that is the issue. Some people believe that the only real money is gold-- which has always maintained some value. The rest is considered to be money by fiat, because a government has said it was money and because people accept it as money.
I believe "money" is whatever people agree on and which can be used in trade or financial transactions...
The Island of Stone Money
https://www.npr.org/sections/money/2011/02/15/131934618/the-island-of-stone-money
Popularity being the basis of value with no connection to reality, it is hard to know anything. Bitcoin is up by a factor of 4 in the last year, so we should sell! But maybe it will go up by a factor of 4 again in the next year? Or if hold and maybe it'll go down by a factor of 4 in the next 2 weeks. I don't see the attraction, unless I was a miner somewhere with cheap electricity.
Humans can be crazy animals, rats in cages with a cocaine lever. Or I think the scientists found rats chose the cocaine if they lived in a sterile environment, but preferred to frolic together in a fun environment. So if we must predict, maybe bitcoin drops when the pandemic ends and everyone gets off their online virtual dopamine factories? Sell by March 1 I say, if you must hold at all.
The theory of Bitcoin is that it is designed such that valid bitstrings get harder and harder to produce, in a manner analogous to gold mining, thereby creating limited supply and avoiding 'currency' inflation. The problem with this idea is that *other* cryptocurrencies can be developed...Ethereum already exists...and there is no guarantee that people will regard Bitcoin as the 'real' one. Whereas gold does have the advantage of several thousand years precedent of acceptance almost everywhere.
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